The federal Bureau of Indian Affairs has rejected the tribal-state compact that the Mashpee Wampanoag tribe needs to have in place before proceeding with plans to build a tribal casino in Taunton.

The BIA, which falls under the umbrella of the Department of the Interior, has sent the agreement back for further negotiations, saying the revenue-sharing arrangement and other components of the compact violate the federal Indian Gaming Regulatory Act.

“We deeply regret that this decision is necessary, and understand that it constitutes a significant setback for the tribe,” Assistant Secretary of Indian Affairs Kevin Washburn said in an Oct. 12 letter to Gov. Deval Patrick.

A provision of the compact that would have seen the tribe send 21.5 percent of its gaming revenues to the state runs counter to “the central premise of IGRA that gaming should primarily benefit tribes,” Washburn’s letter states.

“While we have approved varying revenue sharing schemes in exchange for tangible benefits to tribes for over 20 years, the revenue sharing provisions in this compact go beyond those permitted by the Department and IGRA,” Washburn said in the letter.

The tribe and state pledged to negotiate a new compact. A compact must be in place for a tribe to pursue a casino under IGRA.

“While disappointing, this possibility was anticipated in our agreement with the Commonwealth, which requires that we return to the negotiating table immediately to address the outstanding issues in the Compact and come to a revised agreement,” Mashpee Tribal Chairman Cedric Cromwell said in a statement. “We believe that these issues can be resolved quickly and cooperatively, and the Compact can be re-submitted to the BIA for swift action.”

The BIA’s decision addressed other provisions in the compact, such as tribal hunting and fishing rights, which the bureau said cannot legally be subject to negotiations pertaining to gaming.

“By rejecting the agreement on the grounds of the revenue share and our acceptance of the Tribe's request to separately negotiate its tribal hunting and fishing rights, Interior is substituting its judgment for the Tribe’s,” Gov. Deval Patrick said in a statement. “I believe Interior's approach is outdated and does not adequately take into account our unique circumstances here in Massachusetts.”

A BIA spokeswoman said the bureau will work to “ensure the integrity of this important process” and is encouraging the tribe and state to negotiate a new compact.

“We appreciate the cooperative relationship between the Commonwealth of Massachusetts and the Mashpee Wampanoag Tribe to develop and jointly submit a proposed gaming compact,” BIA spokeswoman Nedra Darling said. “The gaming compact unfortunately contained a number of provisions that did not comply with the law and could not be approved as proposed.”

A new compact would require the state legislature’s approval before being sent to the BIA for federal approval.

Page 2 of 3 - State Sen. Marc Pacheco, D-Taunton, recalled that some casino opponents initially said the original compact was lopsided in the tribe’s favor. The BIA’s ruling states, however, that was far from the case.

“It was not necessarily unanticipated,” said Pacheco, who favors a casino in Taunton.

“I think there was obviously an intense willingness on behalf of both the governor and the tribe to negotiate,” he said. “I still think there’s that commitment to get an agreement. Let’s just hope this is just a bump in the road.”

The Southeastern market

Recognizing that the federal Indian Gaming Regulatory Act allows any eligible federally recognized American Indian tribe to operate a casino if it meets certain requirements and is based in a state that allows casino gambling, Massachusetts includes a section in its state law to address the prospect of a Mashpee casino.

“With respect to the revenue share issue, our Compact reflects our Southcoast market reality,” Patrick said. “The market, not Interior, sets the value of gaming. Additionally, allowing the Tribe early entry into this market represents a meaningful concession on the Commonwealth’s part. It presents an enormous economic benefit to the Tribe and justifies the proposed revenue sharing obligations in our agreement.”

The Massachusetts Expanded Gaming Act, which was signed into law last year, allows for up to one casino in each of three regions of Massachusetts, but the commonwealth won’t solicit bids for a commercial casino in the southeastern region unless the Massachusetts Gaming Commission determines the Mashpee are unlikely to have land taken in trust by the federal government.

That section of the law is currently being challenged in a federal lawsuit filed by KG Urban, which is interested in developing a commercial casino in New Bedford, but is currently frozen out of the market.

The Mashpee and the Aquinnah Wampanoag tribes, both based in southeastern Massachusetts are the only two federally recognized tribes in the state. Patrick has maintained the Aquinnah forfeited their gaming rights in a 1980s land settlement.

The governor has said that he doesn’t believe the market in Massachusetts can sustain more than three casinos statewide, and the state law is intended to prevent a tribal casino and a commercial casino both operating in southeastern Massachusetts and diluting the market.

The question of land

Under IGRA, a tribe can operate a casino if it reaches a compact with the state and possesses sovereign land that’s held in trust by the U.S. government. The compact and land sovereignty are both subject to BIA approval.

The Mashpee have submitted a land application with the BIA. That issue is separate from the compact.

“Let me be clear, the Tribal-State Compact and our land in trust application are two totally separate processes with no bearing on each other,” Cromwell said. “We are very pleased with the progression of our land in trust application and continue to work toward a positive determination.”

Page 3 of 3 - Some have claimed the Supreme Court’s 2009 Carcieri v. Salazar case, in which the court effectively ruled that a tribe that wasn’t under federal jurisdiction by 1934 is ineligible to have land taken into trust for the purpose of gaming, could spell doom for the Mashpee’s plans. The tribe was officially recognized in 2007.

Cromwell, however, has said repeatedly that the Carcieri ruling doesn’t affect the Mashpee.

Last month, Sen. Daniel Akaka, D-Hawaii, chairman of the Senate Committee on Indian Affairs, held an oversight hearing in which he called for Congress to pass a “Carcieri fix,” according to a press release from the committee.

The Mashpee announced in February that they plan to build a casino on land it has an option to purchase in East Taunton. In the following months, the city and the tribe approved an intergovernmental agreement that saw the tribe make a non-refundable $1.5 million payment to Taunton. The municipal-tribal agreement, which is separate from the state compact, also calls for the tribe to share at least $8 million in annual gaming revenue with Taunton.

“I believe the appropriate steps can be accomplished promptly and in a manner that will continue to be beneficial to the City of Taunton and the Commonwealth,” Mayor Thomas Hoye Jr. said.